Allot Ltd.'s Half-Year Rally: What's Next in the Coming 6 Months?

Allot Ltd. [ALLT] shares surged approximately 21% over the past six months, decisively outpacing the broader Internet-Software sector which retreated 7.5% during the same period. This outperformance extends beyond sector comparisons—the stock has also beaten major peers including Cisco Systems [CSCO], which gained 10.3%, while F5 [FFIV] and Palo Alto Networks [PANW] declined 8.1% and 1.1% respectively. This compelling divergence naturally prompts investors to evaluate whether sustained buying of ALLT shares makes strategic sense, particularly when considering what the next 6 months may hold for the cybersecurity specialist.

SECaaS Scaling Drives Allot’s Impressive Financial Momentum

This exceptional stock performance stems from robust traction in Allot’s Cybersecurity-as-a-Service (SECaaS) business, which has become the company’s primary growth accelerator. During Q3 2025, the company’s net sales climbed 14% year-over-year to $26.4 million, exceeding the Zacks Consensus Estimate of $26 million. More impressively, non-GAAP earnings per share surged to 10 cents from just 3 cents in the year-ago period—a 150% beat against analyst expectations.

This momentum proved compelling enough for management to elevate its full-year 2025 guidance. Allot now projects 2025 revenues in the $100-$103 million range, revised upward from the prior $98-$102 million forecast. The company simultaneously raised its SECaaS guidance, now expecting annual recurring revenue (ARR) growth to surpass 60% year-over-year, up from its previous 55-60% guidance.

Telecom Customers and New Offerings Power Recurring Revenue Growth

The SECaaS segment demonstrated particularly impressive scale during Q3 2025, with ARR accelerating approximately 60% compared to the year-ago quarter. This expansion has been fueled by elevated adoption among telecom partners and rising end-user enrollment in security services. The segment now represents roughly 28% of total revenues, with management’s guidance suggesting this share could approach 30% if current momentum persists.

This shift holds strategic importance because SECaaS operates on a subscription-based model, delivering more predictable and stable revenue streams. This has materially improved Allot’s overall revenue quality—recurring revenues now account for 63% of total sales versus 58% a year prior. Tier-1 telecom operators that recently launched services continue adding substantial subscriber bases, while existing customers progressively purchase additional security capabilities, supporting organic upselling opportunities.

Additionally, Allot has introduced innovative offerings like OffNetSecure, which extends protection beyond the operator’s network. This capability broadens SECaaS applicability and creates pathways to increase revenue per end user as telecom partners scale these services and user adoption remains stable.

Valuation Discount Compared to Industry and Peers

Despite demonstrating robust growth trajectories, Allot trades at valuations that appear attractive relative to both its sector and direct competitors. The company currently maintains a forward 12-month price-to-sales (P/S) ratio of 4.54X, positioning it below the Internet-Software industry’s 4.71X multiple. This represents a meaningful discount to peers: Cisco Systems trades at 4.74X, F5 at 4.93X, and Palo Alto Networks at a substantially higher 11.82X.

This valuation discount provides additional appeal for long-term investors seeking exposure to cybersecurity growth without paying premium multiples.

Forward Outlook: What Lies Ahead in 2026 and Beyond

Looking ahead, analyst expectations suggest continued expansion. The Zacks Consensus Estimate projects 2026 revenue growth of 13.3%, with earnings rising 15.9% year-over-year for the same period. Notably, 2026 earnings estimates have been revised upward by one cent over the past 60 days, signaling analyst confidence in Allot’s trajectory as the company moves through 2026.

Given SECaaS momentum, subscription revenue tailwinds, product innovation through solutions like OffNetSecure, and the expanding demand from telecom operators, the company appears well-positioned to sustain growth through the coming 6 months and beyond.

Investment Thesis: Why Allot Deserves Consideration

Allot presents a compelling investment case: a cybersecurity specialist driving substantial revenue growth through a high-margin, recurring-revenue subscription model while trading below industry and peer valuations. The company’s strong Q3 2025 execution, raised full-year guidance, and analyst sentiment improvements reinforce positive momentum. For investors seeking meaningful cybersecurity exposure at reasonable valuations, Allot offers an attractive entry point before potentially larger moves materialize in the coming 6 months. Allot currently holds a Zacks Rank #1 (Strong Buy) rating.